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More than one in three employers see internal equality as the biggest challenge when it comes to remuneration

Three out of ten employers feel insufficiently informed about the statutory framework for pay transparency
PR Plus d’un employeur sur trois considère l’égalité interne comme le plus grand défi en matière de rémunération HERO

More than a third (36%) of European employers consider internal equality within the organisation to be their biggest challenge in the area of remuneration. Three out of ten employers (29%) are actively working to improve pay equality, and 31% say they have specific plans to do so in the future. On the other hand, four out of ten employers currently have no plans to tackle pay inequality. These findings and more are the results of an international survey conducted by European HR service provider SD Worx among more than 5,000 companies and 18,000 employees in 18 European countries.

A fifth (21%) of European employers consider a strategic reward policy and the financial well-being of staff to be one of the most important HR challenges in the current period. This represents a slight decrease compared to three years ago (24%). The biggest challenge in terms of remuneration appears to be internal equality for one-third of companies (36%), where employees receive equal pay for equal work. Nevertheless, four out of ten companies surveyed do not have any specific plans to address this issue, nor are they currently working on it.

 

     

    Three out of ten employers do not meet the legal requirements for pay transparency

    Pay transparency is the second-biggest challenge for employers (35%). At present, 41% of employers do not yet have any specific improvements on the agenda in this regard. More than a quarter (28%) of European employers are actively increasing pay transparency, while a third (32%) have plans to do so.

    Despite this challenge, 42% of employees believe that their organisation strives for full pay transparency to make sure that all staff salaries are not shrouded in secrecy. The United Kingdom (58%), Spain (57%) and Romania (53%), in particular, are leading the way here. However, almost three out of ten employers (29%) are not fully aware of the legal rules surrounding pay transparency, such as the EU Pay Transparency Directive of 10 May 2023 or the specific rules that have applied in the UK for a long time, and are therefore failing to meet the requirements

      More than half are seeing their total wage costs rise

      One-third of employers see challenges in promoting the financial well-being of their staff and reducing financial stress. European employees indicate that a fixed pay increase (44%), variable pay increase (40%) and additional benefits such as health insurance, pension schemes or paid daytime childcare (35%) are the most common initiatives to tackle this issue, although there is no easy solution. Indeed, 28% of employers see the pressure on wage costs as a challenge. As an example, more than half (53%) have seen their total wage costs increase over the past year.

      Communication about their remuneration policy (26%) rounds out the top five challenges for employers.  Three out of ten employers actively communicate or report on their remuneration policy. They do this primarily by having individual conversations with employees about their remuneration (32%) or through official internal communication channels (22%). Nevertheless, three out of ten (29%) say they do not send out specific communications about their remuneration policy. As a result, six out of ten (59%) European employees feel insufficiently informed about what their pay package entails.

        Four pillars for success

        "There are four important pillars for a successful approach to remuneration", says Bruce Fecheyr-Lippens, Chief People Director at SD Worx. "Start with a strategic reward policy. Our research shows that half of European organisations are already working on this issue, with the UK (60%), Romania (58%) and Poland (58%) leading the way. In today's competitive market, it's crucial to align remuneration with what employees find important. This not only helps you to attract talent, but also to retain it. Six out of ten employees believe salary to be the most important criterion when choosing an organisation. Also make sure you have a good balance between remuneration and labour costs. A mix of financial and non-financial benefits increases employee satisfaction and well-being."

        "In addition, personalised and flexible benefits are also essential, and that's something 25% of employers are currently struggling with. Employees want benefits that align with their unique needs and lifestyles, which boosts their productivity. However, less than a fifth (18%) are able to build their own salary package, while 42% would like to have this option. Finally, pay transparency is crucial when it comes to striving for equality on the workfloor. According to the EU Pay Transparency Directive, companies with more than 250 employees must draw up annual reports on the gender pay gap within their organisation. Smaller companies with more than 150 employees have to do this every three years. Yet only a quarter of European organisations currently offer a 'total reward statement. It's a good idea to start by communicating openly about your remuneration policy. This builds trust and creates an honest, transparent workplace where staff feel valued."

          About the international employee survey

          SD Worx, the leading European HR service provider, assists organisations with their HR and payroll. SD Worx conducts regular surveys to find out what really matters to employers and employees. The analysis of the most recent survey, the 'Navigator Series', provides organisations with a compass to navigate the challenges set by HR and payroll. The survey was conducted in February 2024 in 18 European countries: Austria, Belgium, Croatia, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Poland, Romania, Serbia, Slovenia, Spain, Sweden and the UK. A total of 18,000 employees were surveyed. The results are weighted and guarantee a reliable representation of the labour market in each country.

          In Belgium, this concerns 1,000 employees. For Belgium, results were weighted for language, age, gender, education, company size and region of employment, with the weighting coefficients almost all below 1.7.